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Merkle Q3 2020 Digital Marketing Report Released

Merkle is happy to announce the release of our Digital Marketing Report covering Q3 2020. The 36th edition of the Merkle Digital Marketing Report features updates and insights on how digital marketing has fared as the COVID-19 crisis continues, with analyses of major digital ad platforms including Google, Facebook, Instagram, and Amazon.


Download the latest Merkle Digital Marketing Report here.

Below are some high-level findings from the report's executive summary:

As they have been for most of the year, digital marketing trends in Q3 2020 were inextricably linked to the course of the ongoing COVID-19 pandemic and the response to it. Across channels, some of the more extreme reverberations of the crisis lessened in Q3, but most of the numbers continue to show an industry that is not back to normal, nor necessarily settled upon a consistent “new normal.”


For Google, spending growth for its search ads improved in Q3, but relatively strong results for retail and ecommerce were countered by a 40% Y/Y decline in spending among travel brands. As was seen across other channels, while search click growth was not as strong in Q3, average CPC declines were also not as severe, a result of increased competition and advertisers overcoming some of the logistical challenges of the pandemic.


Although search ad clicks to retail sites remained 25% higher in Q3 than prior to the pandemic, the brick-and-mortar store visits they produced were still 30% lower, according to Google estimates, even after a sharp increase over June and July. Retailers have noted better in-store conversion rates, however, as shoppers are more intent on making specific purchases rather than just window shopping.


Google advertisers once again faced Amazon as a competitor in search auctions in Q3, after the ecommerce giant had paused its Google campaigns for most of the second quarter. Amazon’s approach appears to have changed though, as its presence is back to pre-pandemic levels for Shopping ads, but remains diminished for Google text ads.


As for its own ad offerings, Amazon again outpaced other major platforms in advertiser spending growth, even with Prime Day pushed back to Q4. Amazon had struggled with fulfillment challenges into April, but Amazon ad click volume began to rise significantly over late Q2 and into early Q3. Amazon Sponsored Product ad spend growth accelerated from 22% Y/Y in Q2 to 50% in Q3.


Spending on Facebook ads rebounded in Q3, coming in 12% higher Y/Y, excluding Instagram. Any impacts from US election spending on Q3 CPMs appeared to be small as Facebook CPMs fell 10% Y/Y, just a moderate improvement from the pandemic-driven decline of 17% in Q2. Other digital channels with less competition from election ads saw similar improvements in pricing trends between Q2 and Q3.


Instagram saw a smaller decline in spending growth than most other digital ad platforms in Q2, and with some acceleration in Q3, it is nearly back to its Q1 spending growth rate. The trajectory for Instagram Stories ads remained strong in Q3 as the format generated 29% of total Instagram ad spend, among participating brands, and 35% of impressions.


Finally, Google organic search visits to brand sites increased 28% Y/Y in Q3 2020, down somewhat from Q2 growth, but still well above the pre-pandemic historical trend. Prior to the surge in digital commerce brought about by the COVID-19 crisis, organic search visits had been declining by double digits Y/Y.

For more detail on these findings and others, please download the Merkle Digital Marketing Report for Q3 2020.